Trading opened for the week with the gold rate in India holding at Rs 37,800 per 10 grams on 16 September 2019. The bullion surged over 1% following the drone attacks on the Saudi oil facilities, spurring demand for safe-haven assets.
Gold remained on the sidelines over the next couple of days with market participants speculating over a possible interest rate cut by the US Federal Reserve. This led to gold prices in India trading at Rs 37,800 per 10 grams until 18 September 2019.
As expected, the US central bank slashed the key interest rate by 25 basis points for the second time during the year. The interest rate cut led to the US dollar gaining, and gold rates dropped by over 1% to trade at a one-week low of Rs 37,500 per 10 grams on 19 September 2019.
Demand for gold in India remained capped for the remainder of the week with investors refraining from purchases amid the recovering US dollar and well-performing equities.
Subdued demand, coupled with weak market trends overseas led to gold prices remaining unchanged at Rs 37,500 per grams for the rest of the week.
Demand for the metal is expected to improve over the next week as market participants anticipate the Middle East tensions to lend support to safe-haven assets such as gold and silver.
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